China will remove some inferior grain strains from the State's price protection this year in order to urge farmers to optimize their crop-growing mix and produce more high-quality crops.

According to a circular released by the General Office of the State Council, the grains affected include spring wheat in northeast and north China, early indica rice in south China, and wheat and corn in the Yangtze River valley and regions south of the river.

The circular said the adjustment is of great importance to improving the distribution of China's grain production and protecting farmers' long-term interests. It will also spur farmers to grow other varieties of grain or cash crops and increase their income, said the circular. Local grain processing enterprises are allowed to purchase grains directly, and farmers are encourage to sell their produce on wholesale and retail markets. The grain markets will be open throughout the year.

Market management should be strengthened to prevent illegal grain purchase, added the circular. The Agricultural Development Bank of China will offer loans for grain purchase and sale enterprises.

In recent years, the Chinese government has been purchasing farmers' surplus grain output at protective prices, aiming to help them maintain their grain production capacity. The latest move to narrow the scope of price protection came at a time when the country has had ample grain supply in the last few years.